VIDALIA — The City of Vidalia’s audit for the last fiscal year notes the city’s general fund expenditures exceeded its budgeted amount by more than $1 million.

The general fund’s original projected expenditures for the year were $6,250,908. At the final budget adoption, that number was revised to $7,772,175, but the audit says the actual expenditures were $8,933,241.

Click here for copy of Vidalia audit.

That comes to a 14-percent variance, well outside the state mandated threshold of 5 percent.

The audit, prepared by Silas Simmons, says the cause of the variance was “unanticipated capital outlays and increases in general operational expenses that the town was not able to make adjustments in time for.”

In response to the audit’s finding, Mayor Hyram Copeland — repeating the audit’s statement about unanticipated expenses — said in a news release that the city is, “currently working to address the situation and find a way to cut expenses without cutting services or personnel.”

Click here for Mayor Hyram Copeland’s entire response to audit’s findings.

The audit also found errors in bank account reconciliations, and the city’s accounts payable were not being reconciled to the general ledger. Both of those conditions were repeated from the previous year, and both were noted as material weaknesses in internal controls.

“During our audit, we noted numerous errors in the bank account reconciliations to the general ledgers,” the report says, “Bank reconciliations are a cornerstone of accurate financial reporting. We recommend that bank reconciliations be prepared and reviewed on a monthly basis.”

The audit says the reconciliation issue was caused because “management ran out of time to correct the errors within the bank reconciliations before year end,” and recommends that management, “oversees the preparation of bank reconciliations on a monthly basis and follow up on any issues that arise.”

Copeland said the bank reconciliation errors were “an internal issue we are currently working to correct.

“We will working with accounting personnel to ensure that all bank accounts are properly reconciled going forward,” he said.

When finding the accounts payable were not being reconciled to the general ledger, the audit says the general ledger was approximately $44,861 lower than its related subsidiary ledger, something the audit says should be reconciled at least annually.

“The heavy volume of invoices is the main cause of this condition per management. Also, it was noted that the subsidiary ledger is believed to be wrong,” the report says. “We recommend that management reconciles the subsidiary ledger to the general ledger monthly and make any necessary adjustments to accurately state the accounts payable balance at year end. Also, it is recommended that management retains the records and research to support the correct year end balance whether it originates from the subsidiary ledger or the general ledger with explanations of any reconciliation differences.”

Copeland said the city’s administration, “regrets that the (accounts payable) ledger was not properly reconciled to the general ledger; my office is currently in the process of addressing the situation.”

The auditors also noted that, while the report was late, that was because of “unexpected employee turnover at the CPA firm, (which meant) the external auditor was not able to complete the audit in time to prepare and submit the audited financials before the due date.”

The report was due Dec. 31. It was made public Feb. 17 after review by the legislative auditor’s office.

“Unfortunately, our financial statements were not submitted until January 29, 2016,” Copeland said. “While my staff worked to have all requests to auditors in a timely fashion, staffing and scheduling with our accounting firm prevented the report from being timely submitted.  We have discussed this with Silas Simmons and are confident we will not have this issue next year. Unfortunately, this particular finding reflected ‘material non-compliance;’ however the submission was out of our control.”

The audit notes that as of the June 30 end of the fiscal year, the city had $9,754,145 in long-term debt obligations, down from $12,479,569 the year before.

The report notes that other findings from the 2014 audit have been corrected, including allowing financial oversight by the board of aldermen by providing timely financial statements. It also noted that issues reconciling customer deposits to the general ledger, and an issue of monitoring transfers between funds and balancing them accordingly had been addressed.

“Overall, we are pleased with the results of this audit,” Copeland said. “We feel net position is a useful indicator of overall financial position, and our net position has continued to increase over the years; this year our net position increased more than $200,000 to over $43 million. We are moving in the right direction.

“The number of findings from last year’s audit was cut in half, from eight to four, and one of the four was out of our control. We worked hard to address the findings from last year and the reduction shows that, but we will always have areas that need improvement.

“My office will always make every effort to improve and continue to have good audits while keeping Vidalia in a strong financial position so we can continue to deliver the high quality services our citizens have come to expect.”

The release of the official 2015 audit comes after the Vidalia Board of Aldermen voted Feb. 11, to hire a second independent auditor to investigate possible misconduct by a city employee.

City officials have not revealed what that misconduct may be, but said it was connected to a “potential discrepancy” found by the city’s checks-and-balances system.